He described the controversial payment – which yielded one of the biggest newspaper scoops in recent times and delivered the Telegraph a healthy sales increase – as "money well spent in the public interest".

"And let me just say, so far the taxpayer has been reimbursed by MPs £500,000, and there will be more.

"We have got a much better Commons as a result of it, and I think the Telegraph took the decision not lightly, but we were given 24 hours to read that file – it blew our minds when we saw what was in that file."

Ever since the paper began its revelations about MPs' expenses in May, there has been intense speculation at rival papers about what the Telegraph paid for the story.

Most people had thought the paper had handed over about £90,000 for the leaked expenses file, which was turned down by the Times and the Sun.

Pierce's disclosure of the true amount came as the Telegraph revealed that the Whitehall mole responsible for the leak was motivated by anger over the government's failure to provide adequate equipment for British troops.

The unnamed civilian employee said he leaked details of the now notorious claims after becoming indignant about the discrepancy between investment in the armed forces and the receipts put in by MPs.

The mole's account appears in No Expenses Spared, a book published today that has been written by Robert Winnett and Gordon Rayner, two of the Telegraph reporters who led the investigation into the scandal.

The mole was one of the staff responsible for processing parliamentary expenses at the Stationery Office, where his colleagues are said to have included serving soldiers "moonlighting" to buy body armour and other vital equipment.

"It's not easy to watch footage on the news of a coffin draped in a Union Jack and then come in to work the next day and see on your computer screen what MPs are taking for themselves," the mole told the Telegraph.

"They're out in Afghanistan for Queen and country earning £16,000 or £17,000 a year, knowing they're going to take losses, while MPs are sitting in parliament on £65,000, with massive expenses, and meanwhile you've got bodies coming home."

The newspaper said: "The man behind the leak – who is a civilian – has broken cover to tell his story for the first time, in the hope that it will shame the government into finally supplying the right equipment for soldiers risking their lives in Afghanistan."

The only previous clue as to how the story came out has come from John Wick, a former SAS soldier and head of a private security firm, who said he tried to sell the data around media outlets on behalf of the mole in conjunction with PR agent Henry Gewanter.

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